Little Rock broadband operator Windstream Holdings Inc. on Tuesday (Dec. 18) announced that it has sold off fiber assets in Minnesota and Nebraska as part of the company’s strategy to divest little-used parts of a 150,000-mile telecom network.
Nearly a year ago during the company’s year-end 2017 earnings call with Wall Street analysts, company CFO Rob Gunderman said the Arkansas internet service provider was looking to sell off dormant fiber assets on its nationwide network.
“We believe we still have significant asset value to monetize within our fiber assets that we own outright, and we’ve been very active in discussions around that opportunity,” Gunderman said during the February 2018 earnings call. “We continue to dialogue with multiple parties about potential transactions. And while nothing has been completed or announced at this point, we remain optimistic about our opportunities to monetize some of that fiber portfolio.”
In the deal announced just after the closing bell in New York Tuesday, Windstream said it has sold certain fiber assets in Minnesota to Arvig Enterprises Inc., an independent Minnesota-based bundler of internet and telecom services. The all-cash transaction is valued at $49.5 million.
Windstream also announced that it has entered another deal to sell additional fiber assets in Nebraska to Arvig for $11 million. The Nebraska sale is expected to close in the first quarter of 2019. As part of the deals, Windstream said it will establish a fiber network relationship with Arvig to use the Minnesota telecom’s assets to continue to sell its products and services across the two-state area in the nation’s “bread basket” region.
“These transactions monetize latent dark fiber assets in Minnesota and Nebraska, lower capital requirements in each state and allow us to focus on our core network offerings with minimal change to our operations going forward,” said Gunderman. “The structure also sets a roadmap for future fiber monetization across our footprint.”
Added David Arvig, vice president and COO at the Minnesota internet provider, “Expanding our broadband footprint is core to our strategic priorities and bolsters our fiber assets throughout Minnesota and across the Midwest. The additional Nebraska transaction will provide a critical link for our network beyond Minnesota supporting our continued growth throughout the region.”
In Tuesday’s trading session on the Nasdaq stock exchange, Windstream shares closed up 5.9% or 15 cents at $2.68. Over the past year, Windstream shares have traded in the range of $2.47 as a low and $11 as a high.